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A conservative short-term commercial mortgage strategy. Trez Capital Prime Trust participates exclusively in first position mortgages, or sub-tranches of first position mortgages, which have a maximum loan-to-value ratio of 75% at the time of funding. Loans may be secured by real property located in Canada or the United States to a maximum of 25% of the portfolio. The investment objective is to preserve capital, while generating a consistent rate of interest income for distribution to unitholders.

Fund Summary

Fund Manager:

Trez Capital Fund Management Limited Partnership

Asset Class:

Open-ended pooled mortgage fund

Inception Date:

January 2006

Minimum Investment:

$5,000 (500 units)

Redemptions:

30 days' notice, subject to 1% retraction penalty if redeemed within 1st year

Eligibility:

RRSP / RRIF / TFSA / RESP / RDSP / DPSP

FundSERV Codes:

Series A - TRZ400, Series F - TRZ410

DRIP Eligible:

Yes

Fund Assets (09/30/2017):

$85,902,880

Case Studies

Ritz Carlton

Loan:

$5,240,000 participation in $26,200,000 loan

Term:

12 months

Interest Rate:

7.75%

Loan-to-Value:

53%

Description: Investment in a 1st blanket loan to be secured by 19 un-sold condo units and 24 parking stalls in the project known as The Residences at the Ritz-Carleton hotel in Montreal.

West 41st Ave

Loan:

$3,500,000

Term:

13 months

Interest Rate:

6.50%

Loan-to-Value:

64%

Description: Investment in a 1st mortgage loan to develop 15 townhomes on West 41st and 2.5-storey townhomes on Woodstock Avenue. The project will also consist of a 19-stall underground parking garage.

Radisson Hotel

Loan:

$20,000,000

Term:

25 months

Interest Rate:

7% or HSBC Prime Rate + 4.30%

Loan-to-Value:

73%

Description: Investment in a 1st Mortgage acquisition loan secured by a 210,000 sf, 9-storey hotel with 240 rooms located on a 3.5 acre site.

Vancouver Commercial Repositioning

Loan:

$2,700,000

Term:

25 months

Interest Rate:

Greater of 6.75% and P + 3.75%

Loan-to-Value:

64%

Description: Investment in a first mortgage secured by a 6,100 s.f. industrial building to be repositioned as a 23,400 s.f. commercial property.

Calgary Industrial Acquisition

Loan:

$13,100,000 (Tranche B: $2,300,000)

Term:

19 months

Interest Rate:

7.50% (on B Tranche)

Loan-to-Value:

24% (on B Tranche)

Description: Investment in the B tranche of a first mortgage secured by two light industrial assets totalling 134,300 s.f. of net leaseable area.

Toronto Mixed Use Development

Loan:

$12,000,000 (Tranche A: $3,000,000)

Term:

25 months

Interest Rate:

6.0% (on A Tranche)

Loan-to-Value:

19% (on A Tranche)

Description: Investment in the Senior (A) tranche of a first mortgage secured by a retail / office building, zoned for higher density.

Portfolio Composition

Cash (and Equivalents)

$4,305,349

Other Assets

$1,629,207

Mortgage Investments

$87,157,775

Total Assets

$93,092,331

Average Loan Size

$2,355,616

Number of Loans

37

Weighted Average LTV

49.0%

Weighted Average Term-to-Maturity (Months)

11.1

Weighted Average Interest Rate

7.8%

Geographic Region

Alberta

34.2%

British Columbia

30.8%

Texas

8.5%

Florida

2.9%

Quebec

4.8%

Ontario

4.8%

United States - Other

7.6%

Cash and Other Assets

6.4%

Asset Class

Residential

68.4%

Industrial

13.0%

Office

1.7%

Retail

6..4%

Other

4.1%

Cash and Other Assets

6.4%

Security Rank

First Mortgages

98.7%

Cash and Other Assets

1.3%

Weighted Average Term to Maturity

Month-to-Month

6.1%

1 Day - 90 Days

13%

91 days - 120 Days

10.4%

121 Days - 240 Days

18.5%

241 Days - 365 Days

13.1%

Over 365 Days

38.9%

Historical Performance

2017 YTD

1 Year

3 Year

5 Year

Since Inception

Trez Capital Prime TrustSeries F

3.0%

5.2%

5.4%

5.7%

7.3%

Trez Capital Prime TrustSeries A1

2.3%

4.2%

4.3%

4.7%

6.3%

1 A Series units were introduced on April 1, 2013. Returns are reported as F Series returns less 100 bps.

2 Due to the inception of the fund in January 2006, the return for 2006 is an annualized return.

Growth of $10,000

Trez Capital Prime Trust distributes 100% of its net income annually. Unitholders receive quarterly distributions at a rate of 1.0% on Series F units and 0.75% on Series A units, payable fifteen days following each calendar quarter end. All residual income is distributed by way of an annual top-up distribution, which is paid in mid-March following the conclusion of the annual audit of the Trust.

Distribution History

Year

Series

Q1

Q2

Q3

Q4

Quarterly Distribution

Top-up1

Total Distribution

2017

A2

$0.075

$0.075

$0.075

$0.075

$0.225

$0.700

F

$0.10

$0.10

$0.10

$0.10

$0.300

$0.800

2016

A2

$0.075

$0.075

$0.075

$0.075

$0.300

$0.113

$0.413

F

$0.10

$0.10

$0.10

$0.10

$0.400

$0.113

$0.513

2015

A2

$0.075

$0.075

$0.075

$0.075

$0.300

$0.130

$0.430

F

$0.10

$0.10

$0.10

$0.10

$0.40

$0.13

$0.53

2014

A2

$0.125

$0.125

$0.075

$0.075

$0.40

$0.037

$0.437

F

$0.15

$0.15

$0.10

$0.10

$0.50

$0.037

$0.537

2013

F

$0.15

$0.15

$0.15

$0.08

$0.53

$0.04

$0.57

2012

F

$0.15

$0.15

$0.15

$0.15

$0.60

$0.04

$0.64

2011

F

$0.15

$0.15

$0.15

$0.15

$0.60

$0.01

$0.61

2010

F

$0.15

$0.15

$0.15

$0.15

$0.60

$0.04

$0.64

2009

F

$0.15

$0.15

$0.15

$0.15

$0.60

$0.19

$0.79

2008

F

$0.15

$0.15

$0.15

$0.15

$0.60

$0.70

$1.30

2007

F

$0.15

$0.15

$0.15

$0.15

$0.60

$0.22

$0.82

2006

F

$0.15

$0.15

$0.15

$0.15

$0.60

$0.25

$0.85

1 Based on a weighted average return to Unitholders, this amount is an estimate of the average top up distribution paid. Those invested for less than a full one year period will receive a prorated allocation, and those invested in the dividend reinvestment plan will receive a slightly higher top up due to the effects of compounding.

2 A Series units were introduced on April 1, 2013.

Distribution Schedule

Record Date

Expected Pay Date

First Quarter

March 31

April 15

Second Quarter

June 30

July 15

Third Quarter

September 30

October 15

Fourth Quarter

December 31

January 15

Annual Top Up

December 31

March 15

Note: Distributions are taxed in the year that they are earned. T3 slips are distributed to all unitholders in March of each year following completion of the year end audit and payment of the annual top-up distribution.

Fees

Management Fee

1.5% of the Average Annual Gross Assets relating to the F Series and A Series units.

Incentive Fee

10% of the Net Income for each unit series after deduction of the Management fee.

Minimum Investment

Province

Minimum investment when relying on accredited investor exemption1

Minimum investment when relying on offering memorandum exemption2

Minimum investment amount exemption3

Alberta

$5,000

$ 5,000

$150,000

British Columbia

$5,000

$ 5,000

$150,000

Manitoba

$5,000

N/A

$150,000

New Brunswick

$5,000

$5,000

$150,000

Newfoundland & Labrador

$5,000

$5,000

$150,000

Nova Scotia

$5,000

$5,000

$150,000

Ontario

$5,000

$ 5,000

$150,000

Quebec

$5,000

N/A

$150,000

1 Accredited Investor Exemption: There is no regulatory minimum subscription amount for investors qualifying under the Accredited Investor Exemption. However, the minimum initial purchase amount established by the Manager is $5,000.

2 Offering Memorandum Exemption: There is no regulatory minimum subscription amount for investors qualifying under the Offering Memorandum Exemption. However, the minimum initial purchase amount established by the Manager is $5,000. (Only available for residents of British Columbia, Newfoundland & Labrador, Ontario, Alberta, Saskatchewan, Nova Scotia, and New Brunswick, subject to certain restrictions)

3 Minimum Amount Exemption (not available to individuals): The minimum initial subscription amount for investors qualifying under the Minimum Amount Exemption is $150,000 in each province listed above.

TREZ CAPITAL PRIME TRUST is sold BY offering memorandum and is available to:

Residents of British Columbia or Newfoundland & Labrador, who are provided with an offering memorandum and complete a risk acknowledgment form (45-106F4). Investment relies on the Offering Memorandum exemption.

Residents of Ontario, Alberta, Saskatchewan, New Brunswick, or Nova Scotia, who are provided with an offering memorandum and complete a risk acknowledgement form (45-106F4) with Schedule I and Schedule II (Classification of Investors and Investment Limits). Investment relies on the Offering Memorandum exemption.

Residents of Manitoba or Prince Edward Island, who are provided with an offering memorandum and complete a risk acknowledgment form (45-106F4) and an eligible investor certification. Investment relies on the Offering Memorandum exemption.

Residents of Quebec who qualify as accredited investors and complete an accredited investor certification and a risk acknowledgement form (45-106F9 - for individual investors only). Investment relies on the Accredited Investor exemption. or;

By investing a minimum of $150,000 (for entities only). Investment relies on the Minimum Amount exemption.

How To Invest

Units may be purchased directly from Trez Capital, or through a self-directed registered plan administered by one of the following: